Value Of A Keyword

Value Of A Keyword For Website Promotion & Search Engine Opitimization

A 'keyword' or 'keyword phrase' is a word or combination of words that people type into search engines to find what they are looking for. The search engine then uses that keyword to search the Internet (What Search Engines See) for webpages containing that particular keyword. It then sorts through, compiles a list in order of relevance, and returns the results to the customer.

Properly utilized keywords can provide a great Return on Investment (ROI) on website promotion and search engine optimization campaigns. It is very important to gauge the costs associated with marketing a keyword to its potential VALUE to your website. Money spent on a keyword should be proportionate to its perceived value (either monetary or knowledge based) to your company. You do not need to spend a lot of money on a keyword, but its value to you and your competitors is proportionate to its potential income. Some companies generate LARGE amounts of revenue from specific keywords.

Determining the value of a keyword ahead of time is very difficult, and its value will change as your markets and competitors change. A quick guide would be to take the average bid of the top 5-listings on Overture or the cost on Google Adwords. These are a good starting point since both are very popular and a higher percentage of businesses make money by using them. You can also use services like KeywordTool (Search Engine Conversion Rate Calculator) to get a more accurate gauge for keyword value once you have some rankings for your keywords.

You could also use the following formula to calculate keyword value: ((estimated number searches per month) X (average cost per click on Overture) X (average click potential percentage)) = (keyword value for 1-month). Unfortunately, there are a number of flaws with this calculation as the first 3-variables are estimations/ judgments. Nonetheless, it can be used to compare one keyword against another to gain a grasp of its worth.

Profits and Visitors

Increasing the number of visitors does not guarantee increased sales. Thus, getting high rankings based on GENERIC keywords may not actually be beneficial to a business. Keywords need to be specific to your business so that the RIGHT CUSTOMERS are directed to your website. Generic keywords deliver a higher level of value to certain businesses and much less to others. A search for "community college" would result in higher keyword value for a college that has campuses all over the US or offers on-line courses than for a local college in say, Grand Rapids, Iowa or any other local college. The reason is simple, very few people living outside of the local college's specific region will actually be looking to attend there.

In the above example, the keyword phrase "community college Grand Rapids" would hold a much greater value for the college because it is more focused and directed towards the people who are mostly likely to attend the college. This becomes apparent when you look at the actual conversion rates of visitors to the website. The rates will show that the greatest numbers of conversions were for the people who lived in and around the Grand Rapids area. As such, the college stands to reap greater PROFITS from the targeted keywords than from the generic ones. What this means is that, it is very IMPORTANT to look at the value a keyword holds for YOUR business than just the number of people searching for it.

Here's what the previously mentioned formula shows us about the keyword value of the targeted and generic keywords in the case of the above college. Say there were 13,956 searches for "grand rapid community colleges" on Overture with an average bid of $0.10 per-click. Its calculation would be (13,956 X $0.10 X 5% = $69.78 per-month). For "community colleges" there were 80,244 searches on Overture with an average bid of $0.85 per-click. Its calculation would be (80,244 X $0.85 X 5% = $3,410.37 per-month). Now, that value look ridiculously high!! Could it possibly be worth that much? That's difficult to say, but it could be to the right business.

When you consider that there are hundreds of colleges in the US, it is easy to understand that the conversion rate for the keyword "community college" is going to be fairly low while its Internet marketing cost is going to be much higher. On the other hand "grand rapid community college" is very TARGETED making its conversion rate much higher and its website promotion/ marketing cost much lower. Therefore, it would COST LESS to promote the "grand rapid community college" keyword and at the same time get a BETTER conversion rate than using a generic keyword.

Keyword Relevancy Is The Key!

As the above case scenario shows promoting the right keywords is essential to attaining a good ROI on website promotion and search engine optimization campaigns. Promoting specific and relevant keywords allows businesses to promote many more keywords and make MORE PROFIT. Finding the right keywords to promote requires research and proper content to support them. We recommend using the services of a Search Engine Optimization firm (Levels of Search Engine Optimization) to assist you in this endeavor as they will be able to provide you with a well planned and executable website promotion/ Internet marketing strategy.